First insurer must pay AB claim, even if only connection with claimant is fraudulent insurance slip

A first insurer in Ontario has a legal obligation to start paying accident benefits to an auto injury claimant, even though the only “sufficient nexus” between the claimant and the insurance company is information contained in an apparently fraudulent pink insurance slip.
Ontario’s insurance regulator, the Financial Services Commission of Ontario (FSCO), made the finding in Vladmir Danilov and Unifund Assurance Company and Economical Mutual Insurance Company (the intervenor).
Section 268 of Ontario’s Insurance Act dictates that every contract evidenced by a motor vehicle liability policy in Ontario is deemed to provide for accident benefits set out in the law.
Danilov was involved in a 2005 accident with a vehicle owned by Georgiy Gnidenko. After the collision, Danilov applied to Unifund for AB benefits.
At the time of the accident, the police report indicates the 1996 Plymouth van driven by Danilov was insured with Unifund, as indicated on the pink Motor Vehicle Liability Insurance Card shown to the police.
The same card indicated agent or broker of the policy was the Ensurco Insurance Group.
Unifund writes auto insurance policies exclusively through one broker, Johnson’s Insurance Brokers.
Neither Unifund nor Johnson’s had ever wrote or issued the policy, and no such policy was in force at the time of the accident.
Neither insurer nor broker had mailed a pink slip to Danilov, and neither had any relationship with Ensurco, which doesn’t have authorization to write policies on behalf of either.
Neither Danilov nor Gnidenko had ever contacted Unifund or Johnson’s to apply for an auto policy.
Unifund has no evidence that Danilov was complicit in a fraud.
Based on the above findings, Unifund argued that Danilov appeared to have no “sufficient nexus” to make a claim against it.
But the arbitrator found a first insurer’s legal obligation is to pay first, and work out the appropriate insurer later — as long as the initial contact with the insurer was not completely arbitrary.
Unifund was ruled to be the first insurer in this case.
“Certainly there can be no nexus where an applicant attempts to create a relationship by participating in a fraud,” FSCO arbitrator Robert Bujold ruled. “However, that is not the case here.
“In the absence of evidence that Mr. Danilov was complicit in any fraud, it is reasonable to infer from agreed facts that Mr. Danilov relied on the information contained in the police report when he applied to Unifund.
“To apply the phrase used in Valuskas, Mr. Danilov ‘turned his mind’ to the choice of the insurer and applied to Unifund on the basis of the information available to him,” Bujold wrote.